Monthly Archives: January 2022

Case-Shiller index reports 18.8% annual home price gain | Katonah Real Estate


S&P Dow Jones Indices (S&P DJI) today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for November 2021 show that home prices continue to increase across the U.S. More than 27 years of history are available for the data series and can be accessed in full by going to https://www.spglobal.com/spdji/.

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported an 18.8% annual gain in November, down from 19.0% in the previous month. The 10-City Composite annual increase came in at 16.8%, down from 17.2% in the previous month. The 20- City Composite posted an 18.3% year-over-year gain, down from 18.5% in the previous month.

Phoenix, Tampa, and Miami reported the highest year-over-year gains among the 20 cities in November. Phoenix led the way with a 32.2% year-over-year price increase, followed by Tampa with a 29.0% increase and Miami with a 26.6% increase. Eleven of the 20 cities reported higher price increases in the year ending November 2021 versus the year ending October 2021.

The charts on the following page compare year-over-year returns of different housing price ranges (tiers) for Phoenix and Tampa.


MONTH-OVER-MONTH
Before seasonal adjustment, the U.S. National Index posted a 0.9% month-over-month increase in November, while the 10-City and 20-City Composites posted increases of 0.9% and 1.0%, respectively. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.1%, and the 10-City and 20-City Composites posted increases of 1.1% and 1.2%, respectively. In November, 19 of the 20 cities reported increases before seasonal adjustments while all 20 cities reported increases after seasonal adjustments.


ANALYSIS
“For the past several months, home prices have been rising at a very high, but decelerating, rate. That trend continued in November 2021,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite Index rose 18.8% from year-ago levels, and the 10- and 20-City Composites gained 16.8% and 18.3%, respectively. In all three cases, November’s gains were less than October’s.

Despite this deceleration, it’s important to remember that November’s 18.8% gain was the sixth-highest reading in the 34 years covered by our data (the top five were the months immediately preceding November).

“We continue to see very strong growth at the city level. All 20 cities saw price increases in the year ended November 2021, and prices in 19 cities are at their all-time highs. November’s price increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 16 of them.

“Phoenix’s 32.2% increase led all cities for the 30th consecutive month. Tampa (+29.0%) and Miami (+26.6%) continued in second and third place in November, narrowly edging out Las Vegas, Dallas, and San Diego. Prices were strongest in the South and Southeast (both +25.0%), but every region continued to log impressive gains.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred over the next several years or reflects a more permanent secular change. In the short term, meanwhile, we should soon begin to see the impact of increasing mortgage rates on home
prices.”


SUPPORTING DATA
The chart below depicts the annual returns of the U.S. National, 10-City Composite and 20-City Composite Home Price Indices. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded an 18.8% annual gain in November 2021.

The 10-City and 20-City Composites reported year-over-year increases of 16.8% and 18.3%, respectively.


The following chart shows the index levels for the U.S. National, 10-City and 20-City Composite Indices. As of November 2021, average home prices for the MSAs within the 10-City and 20-City Composites are exceeding their winter 2007 levels.

Table 1 below shows the housing boom/bust peaks and troughs for the three composites along with the current levels and percentage changes from the peaks and troughs.


2006 Peak 2012 Trough Current
Index Level Date Level Date
From Peak (%) Level
From Trough (%)
From Peak (%)
National 184.61 Jul-06 134.00 Feb-12 -27.4% 276.12 106.1% 49.6%
20-City 206.52 Jul-06 134.07 Mar-12 -35.1% 282.44 110.7% 36.8%
10-City 226.29 Jun-06 146.45 Mar-12 -35.3% 294.45 101.1% 30.1%


Table 2 below summarizes the results for November 2021. The S&P CoreLogic Case-Shiller Indices could be revised for the prior 24 months, based on the receipt of additional source data.


November 2021 November/October October/September 1-Year
Metropolitan Area Level Change (%) Change (%) Change (%)
Atlanta 203.24 1.4% 1.3% 21.6%
Boston 281.81 0.0% 0.1% 13.5%
Charlotte 225.11 1.4% 1.5% 22.9%
Chicago 171.49 0.5% 0.5% 11.6%
Cleveland 159.84 0.6% 0.7% 14.0%
Dallas 259.12 1.2% 1.1% 25.0%
Denver 289.73 0.8% 0.2% 20.1%
Detroit 159.40 0.7% 0.2% 14.4%
Las Vegas 261.81 0.9% 1.4% 25.7%
Los Angeles 375.31 1.2% 1.4% 19.0%
Miami 337.50 2.0% 1.9% 26.6%
Minneapolis 217.95 0.3% -0.1% 11.2%
New York 251.45 1.0% 0.8% 13.8%
Phoenix 298.30 1.2% 1.1% 32.2%
Portland 309.19 0.5% 0.3% 17.4%
San Diego 367.62 1.0% 1.1% 24.4%
San Francisco 342.56 0.6% 0.0% 18.2%
Seattle 352.87 1.4% 0.6% 23.3%
Tampa 317.13 2.1% 1.9% 29.0%
Washington 283.66 0.5% 0.0% 11.1%
Composite-10 294.45 0.9% 0.8% 16.8%
Composite-20 282.44 1.0% 0.8% 18.3%
U.S. National 276.12 0.9% 0.8% 18.8%
Sources: S&P Dow Jones Indices and CoreLogic
Data through November 2021


Table 3 below shows a summary of the monthly changes using the seasonally adjusted (SA) and nonseasonally adjusted (NSA) data. Since its launch in early 2006, the S&P CoreLogic Case-Shiller Indices have published, and the markets have followed and reported on, the non-seasonally adjusted data set used in the headline indices. For analytical purposes, S&P Dow Jones Indices publishes a seasonally adjusted data set covered in the headline indices, as well as for the 17 of 20 markets with tiered price
indices and the five condo markets that are tracked.


November/October Change (%) October/September Change (%)
Metropolitan Area NSA SA NSA SA
Atlanta 1.4% 1.5% 1.3% 1.4%
Boston 0.0% 0.1% 0.1% 0.4%
Charlotte 1.4% 1.5% 1.5% 1.6%
Chicago 0.5% 1.2% 0.5% 0.9%
Cleveland 0.6% 1.2% 0.7% 1.3%
Dallas 1.2% 1.3% 1.1% 1.3%
Denver 0.8% 1.2% 0.2% 0.6%
Detroit 0.7% 1.2% 0.2% 0.9%
Las Vegas 0.9% 1.3% 1.4% 1.7%
Los Angeles 1.2% 1.4% 1.4% 1.4%
Miami 2.0% 2.0% 1.9% 1.9%
Minneapolis 0.3% 0.9% -0.1% 0.3%
New York 1.0% 0.8% 0.8% 0.5%
Phoenix 1.2% 1.4% 1.1% 1.3%
Portland 0.5% 0.9% 0.3% 1.1%
San Diego 1.0% 1.5% 1.1% 1.4%
San Francisco 0.6% 0.8% 0.0% 0.4%
Seattle 1.4% 2.1% 0.6% 1.5%
Tampa 2.1% 2.0% 1.9% 1.8%
Washington 0.5% 0.7% 0.0% 0.0%
Composite-10 0.9% 1.1% 0.8% 0.8%
Composite-20 1.0% 1.2% 0.8% 1.0%
U.S. National 0.9% 1.1% 0.8% 1.0%
Sources: S&P Dow Jones Indices and CoreLogic
Data through November 2021
For more information about S&P Dow Jones Indices, please visit https://www.spglobal.com/spdji/.

Existing home sales up 8.5% in 2021 | Katonah Real Estate

Home sales in the U.S. ended 2021 on a low note in December, but annual sales activity for the entire year reached its highest level since 2006.

Existing home sales fell 4.6% to a seasonally adjusted 6.18 million million units in December from a month earlier, according to the National Association of Realtors (NAR). November existing home sales were revised slightly down to 6.46 million from 6.48 million. The number of sales was down 7.1% from the same month a year ago. The results were far more disappointing than analysts’ expectations of a 0.5% month-over-month decrease to 6.43 million units, according to Bloomberg consensus estimates.

For the entire year, there were 6.12 million units sold in 2021, the most since 2006 and up 8.5% from the prior year when activity was fueled by pent up demand from COVID-19 lockdowns, according to the NAR. Prior to COVID, there were 5 million to 5.5 million unit sales per year. The December results could have been anticipated since pending home sales slipped in November, which is an indicator of future sales activity.

“December saw sales retreat, but the pullback was more a sign of supply constraints than an indication of a weakened demand for housing,” said Lawrence Yun, NAR’s chief economist, also attributing the slowdown in the final month of 2021 to rising mortgage interest rates, “which can produce mixed results. Some people want to hurry and buy, others want to wait to buy. Rising rates will cut into home sales.”

The 30-year fixed-rate mortgage rose to its highest level at 3.56%, up from the previous week and hitting a new high not seen since March 2020, according to Freddie Mac. 

“Mortgage rates moved up again as the 10-year U.S. Treasury yield rose and financial markets adjusted to anticipated changes in monetary policy that will combat inflation,” said Sam Khater, Freddie Mac’s chief economist, in a press statement. “As a result of higher mortgage rates, purchase demand has modestly waned in advance of the spring homebuying season. However, supply remains near historically tight levels and home prices remain high, keeping the market competitive.

Total housing inventory at the end of December was 910,000 units, down 18.0% from November and down 14.2% from one year ago — the lowest level since 1999, when NAR started tracking inventory for all housing types (NAR started tracking single family home inventory in 1982). Unsold inventory sits at a 1.8-month supply at the present sales pace, down from 2.1 months in November and from 1.9 months in December 2020.

“The fall in existing home sales has nothing to do with demand or interest rates, and everything to do with supply. The previous two months had seen a strong surge in sales, helping to drain inventories and make an already tight market tighter,” said Robert Frick, corporate economist at Navy Federal Credit Union, in a statement. “While mortgage rates are rising, they wouldn’t have affected the December data, and may not have much of an effect on sales as long as they stay well below the historical average. Unfortunately, the tight market continues to push up home prices, with the median price up 15.8% from a year earlier. With every month, fewer first-time homebuyers, especially, can afford a home.”https://flo.uri.sh/visualisation/5640681/embed?auto=1

The median existing-home price for all housing types in December was $358,000, up 15.8% from December 2020 ($309,200), as prices rose in each region. The South witnessed the highest pace of appreciation. The re-acceleration of price increases, from the low teens, in December implies that demand is still strong as supply continues to wane, Yun said. 

Prices were pushed up by the sale of homes in the higher price range. The number of homes sold above $1 million was up 38% from a month ago, while sales of homes from $750,000 to $1 million was up 32%, according to NAR. 

“Although they lagged behind year ago levels, existing home sales hit its 4th straight month at above 6 million in December, closing out 2021 on a relatively high note. Rising concerns about inflation gave home shoppers a big reason to stay in the market in December: The potential opportunity to close on a home before prices and mortgage rates tick up further,” said Realtor.com Chief Economist Danielle Hale in a statement prior to the results.

Hale added: “With housing inventory dwindling and prices rising, finding the right home that’s still in the budget continues to be the hardest part of the real estate journey — and means the supply of for-sale homes remains a key driver of sales activity. This is illustrated by existing home sales trends over the course of 2021, which started strong before dipping in the traditionally busy spring and summer months, when there were few homes available for sale, and then rebounded into the fall as more new sellers meant more options for eager buyers to jump on.” 

read more…

finance.yahoo.com/news/

Single family housing starts up 13.4% in 2021 | Bedford Hills Real Estate

Home building ended 2021 with strong annual gains as demand accelerated in the wake of the pandemic. These annual gains were realized despite supply-chain limitations for materials and ongoing access issues for labor and lots. Single-family starts ended 2021 with a 13.4% increase for a total of 1.123 million starts. Multifamily 5+ unit construction ended the year with a 22.1% gain, for a total of 460,100 starts. A component of the missing middle, 2 to 4 unit construction showed a decline for 2021, a 2.8% drop.

For the month of December, overall housing starts increased 1.4% to a seasonally adjusted annual rate of 1.7 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The December reading of 1.7 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 2.3% for the month to a 1.17 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 10.6% to an annualized 536,000 pace in December.

Due to supply-chain effects, there are 144,000 single-family units authorized but not started construction—up 38.5% from a year ago. However, this total is down from a cycle high in October of 154,000.

In January, single-family builder confidence decreased one point to a level 83 on strong buyer demand, according to the NAHB/Wells Fargo Housing Market Index (HMI). After peaking at a level of 90 in November 2020, builders have reported ongoing concerns over elevated lumber and other construction costs, as well as delays in obtaining building materials. The NAHB forecast projects growing labor shortages as the overall unemployment rate trends lower in the quarters ahead.

While the single-family sector cooled at the start of 2021, off the unsustainable seasonally adjusted pace of last Winter, recent readings, including the HMI, suggest ongoing stabilization. The December read of housing starts is consistent with this analysis. In fact, single-family permits showed strength for the month, rising 2% and up 13.4% for 2021.

Multifamily construction continues to expand strongly on declining vacancies and rising rents. For December, 5+ unit production was up 13.7% to a 524,000 annualized rate. This momentum will continue in 2022.

On a regional and year-to-date basis, combined single-family and multifamily starts are 22.2% higher in the Northeast, 10.9% higher in the Midwest, 15.3% higher in the South and 16.9% higher in the West.

As an indicator of the economic impact of housing, there are now 769,000 single-family homes under construction. This is 26% higher than a year ago. There are currently 750,000 apartments under construction, up 15% from a year ago. Total housing units now under construction (single-family and multifamily combined) is 20% higher than a year ago.

Overall permits increased 9.1% to a 1.87 million unit annualized rate in December. Single-family permits increased 2% to a 1.12 million unit rate. Multifamily 5+ unit permits increased 19.9% to an annualized 675,000 pace.

Looking at regional permit data on a year-to-date basis, permits are 22.4% higher in the Northeast, 14.4% higher in the Midwest, 16.3% higher in the South and 19% higher in the West.

read more…

eyeonhousing.org

The campaign to ban gas stoves | Bedford Real Estate

Over the past three years, dozens of cities across the country have banned natural gas hookups in newly constructed buildings as part of a growing campaign to reduce carbon emissions from homes. The movement scored a major victory last month, when New York City’s outgoing Mayor Bill de Blasio signed into law a ban on gas hookups in new buildings.

Though new laws apply to the entire home, the policy debate often focuses on one room in particular: the kitchen. Gas stoves account for a relatively small share of the emissions released by a typical household, but they’ve become a proxy for a larger fight over how far efforts to curb at-home natural gas consumption in the name of fighting climate change should go.

Natural gas consumption accounts for 80 percent of fossil fuel emissions from residential and commercial buildings, according to the Environmental Protection Agency. One study estimated that New York’s ban on its own would create an emissions reduction comparable to taking 450,000 cars off the road. But the movement has met significant pushback. About 35 percent of U.S. homes use gas for cooking, and surveys show that many people are resistant to switching to an electric or induction range. The gas industry has also launched a massive lobbying campaign that has helped convince 19 Republican-led states to preemptively bar local governments from imposing bans on natural gas.

Beyond the climate implications of natural gas in general, there is also a movement to phase out gas stoves because of the harmful pollutants they release inside the home. Cooking on a gas stove releases nitrogen dioxide, carbon monoxide and formaldehyde, chemicals that have been connected with negative health conditions like asthma, with particular risk to children. One study found that gas stoves can create levels of nitrogen dioxide indoors exceeding the legal limits for outdoor air.

Why there’s debate

The debate over gas stoves is really a two-part conversation, with one element focusing on the environmental harms of at-home natural gas consumption in general, and the other specifically on the indoor pollution that gas cooktops create.

Climate change activists see gas bans as a powerful way to reduce the greenhouse gases created by buildings, which account for about 13 percent of total U.S. emissions. They argue that — unlike burgeoning technologies like a green power grid and electric vehicles — clean alternatives to gas heaters, appliances and stoves are readily available to most consumers. Critics of the bans, on the other hand, are skeptical of how much they’ll really reduce emissions, worry about increasing costs for homeowners and argue that market-based solutions will be most effective at promoting a transition to electrified homes.

When it comes to health, advocates say gas stoves are simply too toxic to be installed in new homes. They call for governments to create financial incentives to help homeowners switch to electric or induction stoves, an expense they argue will ultimately save money relative to the cost of potential health problems.

The gas industry makes the case that with proper ventilation, gas stoves can be safe. Conservatives also take issue with the idea of the government limiting individual choice. Others argue that focusing on gas stoves, a product many people have an intense loyalty to, will only increase resistance to electrification as a whole.

What’s next

The list of cities to ban gas hookups in new construction appears primed to grow in the coming years, and opposition is likely to ramp up in response. So far, no statewide bans have been put in place. California has come the closest. Starting next year, all homes built in the state may be required to be wired so they’re “electric ready” even if they have gas appliances installed. In New York, Gov. Kathy Hochul has proposed a statewide ban as part of a multipronged initiative to combat climate change.

Perspectives

Supporters

Gas bans are the only way to meaningfully reduce emissions from the home

“For the individual homeowner, as for society at large, managing harmful pollution eventually starts to seem a little silly when equally effective, affordable, and pollution-free alternatives are available. It’s time to start making new buildings all-electric and switching out all those existing gas appliances, including gas stoves, for electric alternatives.” — David Roberts, Vox

Gas stoves are a great entry point for the broader effort to electrify homes

“The humble stove may seem like a tiny part of a big problem — but it’s one of our most personal, immediate and tangible. It’s also one of the easiest to change.” — Brady Seals, Guardian

A combination of legal limits and financial incentives could supercharge a shift away from gas

“The government could speed things up mightily with subsidies and regulation. If the state provided a big credit for property owners to replace their gas stoves, with particular attention on older stoves in apartment buildings (they often leak or burn very inefficiently), and set up new regulations on the amount of air pollution appliances could produce that would gradually tighten over time, gas cooking could be replaced entirely.” — Ryan Cooper, the Week

Gas stoves are toxic to our health

“Cooking is the No. 1 way you’re polluting your home. It is causing respiratory and cardiovascular health problems; it can exacerbate flu and asthma and chronic obstructive pulmonary disease in children. … You’re basically living in this toxic soup.” — Shelly Miller, environmental engineer, to Mother Jones

Electrification of homes is one of the few climate transitions that’s possible right now

“Real estate developers already have most of the technology to replace furnaces with heat pumps, hot water heaters with electric boilers, and gas stoves with induction cooktops. And because cities and towns control building and energy codes, it’s one of the few areas where they have the power to push through deep emission cuts.” — Ysabelle Kempe, Grist

Climate change is too important to leave up to the free market

“The pursuit of market-based solutions … as a pathway to addressing the energy transition in low-income and disadvantaged communities is likely infeasible, and also ethically dubious. Market-based solutions have not achieved their desired goals, thus new ways of thinking need to emerge.” — Multiple authors, the Appeal

Opponents

Gas bans rob consumers of their freedom to choose what to have in their homes

“As for the gas stove, it’s the next target for elimination, because it uses gas. The Left, if they get control of everything, would ban it from new manufacture nationwide and then ban its replacement and ownership. … If someone in Montana or Florida or Seattle says, ‘But I prefer gas,’ you can only roll your eyes.” — James Lileks, National Review

The free market will be much more effective at promoting a transition from gas

“With respect to the goal of reducing greenhouse gas emissions, there would be no need to mandate building electrification if it were already cheaper than the fossil fuel alternatives for heat, hot water, and cooking. … In other words, the adoption of electric home heating has been proceeding expeditiously without mandates.” — Ronald Bailey, Reason

Attacking gas stoves is a great way to turn people off from electrification in general

“Home kitchens thus account for about 0.4% of U.S. natural gas use. … That’s not a lot! Gas cooking does, however, seem likely to be the biggest obstacle to the effort to electrify the American home in the name of slowing climate change. Why’s that? Mainly because people (myself included) like cooking with gas! It’s one of the few energy uses that inspires brand loyalty to the fuel consumed.” — Justin Fox, Bloomberg

Gas bans will actually increase emissions without a green energy grid

“It has evolved into the transitional fuel of our time, allowing the U.S. to quickly ditch coal while giving renewables time to expand to the scale needed to power the entire electricity-hungry country. Once those renewables have reached that scale, banning natural gas in residential construction starts making environmental sense. Until then, these proposals are ultimately increasing our carbon footprint.” — Ognjen Miljanić, The Hill

Gas stoves aren’t ideal, but aren’t as harmful as critics make them out to be

“It’s a good choice to avoid gas if you’re replacing your stove anyway. … But if you’re looking for personal ways to protect the environment and your health right now, you have much bigger fish to fry. Electrifying your space- and water-heating systems, or your car, will have a massively larger impact, as will ventilating your kitchen.” — Liam McCabe, New York Times.

read more…

news.yahoo.com/

Building Materials Prices Increase 1.5% in December | Bedford Corners Real Estate

The prices of goods used in residential construction ex-energy climbed 1.5% in December (not seasonally adjusted), according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The index was driven higher by large price increases for wood products.

Building materials prices increased 15.9% in 2021 and have risen 18.6% since December 2020. Since declining 1.8% between July and August 2021, the index has climbed 4.5%.

The price index of services inputs to residential construction increased 0.4% in December following a five-month period over which the index declined 13.6%.  The index is 9.6% higher than it was 12 months prior and 19.6% higher than the January 2020 reading.

Softwood Lumber

The PPI for softwood lumber (seasonally adjusted) increased 24.4% in December and has gained 44.5% since September.  According to Random Lengths data, the “mill price” of framing lumber has roughly tripled since late August.

The PPI of most durable goods for a given month is largely based on prices paid for goods shipped, not ordered, in the survey month. This can result in lags relative to cash market prices, suggesting another sizable increase in the softwood lumber producer price index may be in the next PPI report.

Record-high volatility of softwood lumber prices continues to be as problematic as high prices. The monthly change in softwood lumber prices averaged 0.3% between 1947 and 2019. In contrast, the percent change of the index has averaged 12.0% since January 2020—the highest 24-month average since data first became available 1947 and nearly triple the previous record.

Steel Products

Steel mill products prices rose 0.2% in December, the smallest monthly increase since September 2020. Monthly price increases have slowed in each of the past five months.

The last monthly price decrease in steel mill products occurred in August 2020, and the index has climbed 152.2% in the months since–with more than 80% of that increase taking place in 2021.

Ready-Mix Concrete

The PPI for ready-mix concrete (RMC) gained 0.9% in December after increasing 1.1% in November.  The index for RMC increased 6.5% between January and December 2021 and is 9.3% higher than the January 2020 level.

At the regional level, prices increased in the South (+1.0%) and West (+1.1%) as prices declined in the Midwest (-0.1%).  The price of RMC held steady in the Northeast.

 Gypsum Products

In December, the PPI for gypsum products decreased 0.5%–the second consecutive monthly decline.  Gypsum products prices ended the year 18.2% higher than they were in January.

Paint

The PPIs for exterior architectural coatings (i.e., paint) increased 1.6% in December while the price of interior paint was unchanged. Neither index has declined since January 2021 and the January-to-December price increases of architectural coatings is unprecedented–exterior and interior paint prices climbed 19.8% and 10.9%, respectively, in 2021.

Other Building Materials

The chart below shows the 12-month and year-to-date price changes of other price indices relevant to the residential construction industry.

Building Materials Wholesaling and Retailing

In contrast to the PPI for building materials retailing—which increased 0.4% in December—the Producer Price Index for building materials wholesaling decreased 1.3% over the month.  The wholesale and retail services indices measure changes in the nominal gross margins for goods sold by retailers and wholesalers. Gross profit margins of retailers, in dollar terms, have declined 25.7% since reaching an all-time high in June 2021 but remain 27.3% higher than the January 2020 level.

Building materials wholesale and retail indexes account for roughly two-thirds of the PPI for “inputs to residential construction, services.”

Professional Services

The category of professional services carries the third most weight among those that make up the service inputs to residential construction PPI.  The prices of legal, architectural, and engineering services changed 0.5%, 0.0%, and -0.1%, respectively, in December. Although the year-to-date increase in prices of professional services used in residential construction are quite modest compared to that of materials, prices have increased more in 2021 than they had by December 2020; the difference is especially striking for architectural services.

Though the difference in price changes for legal services is small, the percentage increases are large relative to engineering and architectural.  This follows with a trend in recent years.  Since December 2018, the price of legal services has risen 13.6%–much more than the three-year increase in architectural (+1.1%) and engineering services (+5.8%).

Metal Treatment Services

Prices of metal treatment services increased 1.2%, on average, in December.  The subset of these services used to calculate the services inputs to residential construction includes plating and polishing, coating and allied services, and heat treating.

Metal coating and allied services increased the most over the course of 2021 (+14.9%, NSA).  Metal heat treating and plating and polishing services climbed 6.2% and 3.8%, respectively, between January and December.  The average monthly price increase of the three services was just 0.1% over the course of 2020.

read more…

eyeonhousing.org/2022/01/

Why lumber prices have nearly tripled again since cratering a few months ago | Pound Ridge Real Estate

Simple economics popped the lumber bubble last year. Once the price of lumber topped $1,515 per thousand board feet in the spring, do-it-yourselfers en masse stopped buying. At the same time, sawmills trying to cash in on the sky-high prices increased production, contributing to prices plummeting by August to $389 per thousand board feet. Suddenly, lumber buyers, who were used to paying $350 to $500 per thousand board feet prior the pandemic, felt some serious relief.

End of the story, right? Not at all. Since bottoming in August, lumber has gone on another run that’s starting to look a lot like the historic run we saw last spring. As of Friday, the cash market price is back up to $1,111 per thousand board feet. That’s up 186% (or almost triple) above its bottom price in August.

But the dynamics pushing up prices are very different this time. During the last go around, pandemic lockdowns had limited production just as remote working set off a home renovation boom and recession-induced low mortgage rates spurred more demand for homebuilding. Instead of lockdowns, blame mother nature this time. The bad wildfire season this summer in the U.S. Pacific Northwest and British Columbia—the epicenters of North American softwood production—saw some sawmills curtail production. Meanwhile, mudslides and flooding caused by a record rainfall in November have delayed lumber shipments coming out of the Port of Vancouver. That supply decline is simply outmatched by high demand from builders who are still selling homes faster than they can build them.

As prices started to spike late last year, suppliers and homebuilders responded by increasing their lumber orders. Stinson Dean, CEO of Deacon Lumber, a lumber trading company, tells Fortune those buyers didn’t want to get caught off-guard like last time so they bought ahead “just in case” prices climbed back to the exorbitant levels of spring 2021. Of course, that influx of buyers only put more upward pressure on prices.

“Demand is phenomenal. We have been inundated with job quotes for the last two months, and have booked record amounts of future business. Buyers don’t want to get caught flat-footed and have the market run away from them like happened a year ago,” says Michael Goodman, director of specialty products at Sherwood Lumber.

Where do we go from here? Industry insiders don’t foresee lumber over $1,000 per thousand board feet as the new normal. Inevitably, sawmills will chase profits and increase production. But it’s tough to say when prices will fall again.

“Ultimately the frenzy will subside likely later in the first quarter or early in the second quarter, and we will start to see headwinds like higher interest rates,” Goodman says. Of course, higher interest rates and mortgage rates, which are expected to rise this year, could slow the housing market and building.

But don’t expect cheap lumber anytime soon. Even if lumber prices pull back somewhat, it doesn’t mean we’re headed back to pre-pandemic levels. There is a shortage of around 4 million homes—a dynamic that is likely going to keep builders busy (aka buying more lumber) for years to come.

read more…

fortune.com/2022/01/12/

Westchester 2021 sales up 10.4% | Armonk Real Estate

“2021 continued to be a record-breaking year in real estate, not just in the markets we serve but also nationally,” Liz Nunan, president and CEO of Houlihan Lawrence, said in the brokerage’s newly released fourth-quarter report on lower Hudson Valley real estate.

Liz Nunan

Home sales in Westchester were up 10.4% for 2021, while Putnam and Dutchess counties reported gains of 8% and 2.7%, respectively. Nearly every submarket in Westchester posted double-digit sales gains, according to the report.

“While the first half of 2021 varied in specific metrics to the second half, two factors remained constant. The inventory was at an all-time low, and buyer demand was exceptionally strong,” Nunan said. “As the year progressed, the sales outpaced inventory replacement, and this further restriction led to a decline in pending sales and, eventually, closed sales.”

In the fourth quarter, the number of listings declined 42% in Westchester County year over year. In Putnam County, that number was down 34%, and in Dutchess County listings were down 44%.

“2022 will likely not see the record-breaking number of sales seen in 2021. But until the supply and demand fall into balance, the market will still be charged with buyers, and sellers will continue to prosper,” Nunan said.

In the fourth quarter, 1,669 single-family homes sold in Westchester, compared with 2,228 in the first quarter of 2020, a drop of 25.1%. The median sale price was $725,000, a 1% drop from $732,000 in the fourth quarter of 2020.

For all of 2021, 7,541 single-family homes changed hands in Westchester, compared with 6,649 in 2020, a 10.4% gain. The median sale price for the year went up to $780,000 from $735,000 in 2020, a 6.1% gain.

The number of condominiums sold in Westchester went up by 31.8% from 1,242 in 2020 to 1,637 in 2021. The median sale price also was up at $425, 000 in 2021 compared with $403,000 in 2020, a 5.5% increase.

In the fourth quarter, condo sales dropped 4.3% from 470 in the fourth quarter of 2020 to 450 in 2021’s fourth quarter. The median sale price increased 4.9% from $410,000 in Q4 of 2020 to $430,000 in Q4 of 2021.

Co-op sales in Westchester were up by 35.3% from 1,562 units sold in 2020 to 2,114 in 2021. The median sale price was $194,100, up 6.1% from 2020’s $183,000.

For the fourth quarter of 2021, co-op sales stood at 547 units, a 10.3% increase from the 496 units that changed hands in the fourth quarter of 2020. The median sale price inched up 2.9% from $185,000 in Q4 of 2020 to $190,400 in Q4 of 2021.

In Putnam, there were 1,342 single-family homes sold in 2021 compared with 1,241 in 2020. The median sale price for the year was $440,000, up 16% from 2020’s $379,999. It also was up 16% for the fourth quarter of 2021 compared with the fourth quarter of 2020, reaching $455,750 from $394,250.

There were 199 condos sold in Putnam during the year, compared with 175 sold in 2020, a 15% increase. The median sale price was up 12.7% at $290,000 compared with 2020’s $257,250. For the fourth quarter of 2021, 43 units were sold, a drop of 28.3% from the 60 units sold in the fourth quarter of 2020. However, the median sale price went up 12.1% from $280,950 in Q4 of 2020 to $315,000 in Q4 of 2021.

In Dutchess County, 2,759 single-family homes were sold in 2021 compared with 2,686 in 2020. In the fourth quarter of 2021, 665 single-family homes sold compared with 997 in 2020’s fourth quarter, a drop of 33.3%. The median sale price rose 14.7% from $339,900 in 2020 to $390,000 in 2021. For the fourth quarter of 2021, the median sale price was up 7.3% to $396,000 from $369,000 in the same period in 2020.

There were 628 condominiums sold in 2021 in Dutchess, up 38% from the 455 that sold in 2020. There were 152 sold in Q4 of 2021 compared with 159 in Q4 of 2020, a 4.4% drop. The median condo sale price was $231,056 for Q4 of 2021, down 7.6% from $250,000 in the fourth quarter of 2020. For the year,the median sale price was $235,000, a 5.4% increase from 2020’s $225,000.

read more…

westfaironline.com/144213/

Mortgage rates average 3.45% | South Salem Real Estate

 Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.45 percent.

“Mortgage rates rose across all mortgage loan types, with the 30-year fixed-rate mortgage increasing by almost a quarter of a percent from last week,” said Sam Khater, Freddie Mac’s Chief Economist. “This was driven by the prospect of a faster than expected tightening of monetary policy in response to continued inflation exacerbated by uncertainty in labor and supply chains. The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future.”

News Facts

  • 30-year fixed-rate mortgage averaged 3.45 percent with an average 0.7 point for the week ending January 13, 2022, up from last week when it averaged 3.22 percent. A year ago at this time, the 30-year FRM averaged 2.79 percent.
  • 15-year fixed-rate mortgage averaged 2.62 percent with an average 0.7 point, up from last week when it averaged 2.43 percent. A year ago at this time, the 15-year FRM averaged 2.23 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.57 percent with an average 0.3 point, up from last week when it averaged 2.41 percent. A year ago at this time, the 5-year ARM averaged 3.12 percent.

The PMMS is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

New York’s eviction moratorium will end January 15th | Chappaqua Real Estate

New York’s eviction moratorium will not be extended after it expires this weekend, Gov. Kathy Hochul announced Tuesday. In the meantime, the state’s rent-relief portal will be reopened to give aid to New Yorkers facing eviction. The freeze on evictions was established at the beginning of the Covid pandemic by former Gov. Andrew Cuomo to give relief to struggling New Yorkers. Over the past two years, it has been extended multiple times, with Hochul extending it to January 15 during her first week in office.

“We talked about giving people a little more breathing room, giving them just a little more relief on a short-term basis, and that went all the way to January 15,” Hochul said on Tuesday. “That was something no other state has done to my knowledge, and what we want to do is let people know that that is concluding very shortly.”

The ending of New York’s eviction moratorium comes after months of legal struggles between the federal government and New York. Last August, the Supreme Court partially blocked New York’s eviction moratorium claiming that the ban was unconstitutional because landlords had no way to challenge their tenant’s claims. When Hochul extended the ban in September, the original moratorium was altered to allow landlords to challenge their tenant’s claims in court.

Offering struggling New Yorkers an alternative, Hochul brought up the idea of reopening the rent-relief portal, which would give New Yorkers facing eviction the opportunity to have their eviction proceedings halted temporarily. “There is another option, which is reopening the portal. This is going to have the same effect in terms of allowing people to take advantage of a situation if they’re not able to pay their rent. They can have a cessation of the eviction proceedings for the time being.”

With the expiration of the moratorium closing in, tenant advocates have focused their attention on pushing for the passage of the good cause eviction bill, which would ban landlords from denying tenants a lease renewal without sufficient reasoning. The bill also guarantees tenants protection from eviction if their landlords increase their rent by 3 percent or by 150 percent of the Consumer Price Index.

In October of 2021, the federal government said that it would be reallocating unused funds from its first $25 billion allocation for emergency rental assistance and would be taking requests from states who needed a portion of it. In November, the state requested $1 billion in supplemental funding from the Department of Treasury to help residents facing eviction but received only $27 million this week.

“The federal government said that they were going to set aside money from other states that didn’t use it. We asked the Department of Treasury for over $978 million of that money to come to New York to help our backlog because by then we had probably $1 billion dollars worth of claims,” Hochul said. “That money, despite our efforts, resulted in $27 million dollars this week.”

Joseph Strasburg, the president of the Rent Stabilization Association, a group representing 25,000 owners of rent-stabilized apartments in the city, encouraged the end of the moratorium.

“The rolling eviction moratorium, now going on nearly two years, was intended as a temporary emergency response, and not as a long-term, sustainable solution,” Strasburg said. “The state of emergency was lifted last June, tenants have received billions of dollars in rent relief and other federal and state assistance, and despite COVID variants, the economy continues to rebound with millions of job openings still waiting to be filled. It’s time to end the eviction moratorium and put an end to tenants skipping the rent because there are no repercussions for not paying.”

In his statement, Strasburg mentioned that despite the eviction moratorium coming to an end, New Yorkers facing eviction in the face of Covid-related financial struggles are protected by the Tenant Safe Harbor A

read more…

6sqft.com

Four States Including NY Seek U.S. Supreme Court To Hear SALT Deduction Appeal Case | North Salem Real Estate

ALBANY—New York Gov. Kathy Hochul and New York Attorney General Letitia James announced on Jan. 3 that New York, Connecticut, Maryland, and New Jersey filed a petition for certiorari to the U.S. Supreme Court to continue their lawsuit against the federal government for its unlawful and unprecedented cap on the deduction for state and local taxes, known as SALT.

The petition asks the Supreme Court to review an October 2021 ruling by the U.S. Court of Appeals for the Second Circuit that upheld the district court’s rejection of the states’ suit, which argues that the SALT cap was a politically motivated bid by the former federal administration to interfere with the policy choices of predominantly Democratic states.

“The SALT deduction cap is nothing less than double taxation on New Yorkers,” New York Gov. Hochul said. “Repealing the SALT cap would not only put more money into the pockets of New York families, it would deliver a much-needed boost to New York’s economy. I am proud we are taking this issue to the Supreme Court to continue to fight on behalf of New York taxpayers.”

“This unfair cap has already placed a significant financial burden on countless hardworking, middle-class families in New York, and in the years to come, it is expected to cost New York taxpayers more than $100 billion,” said Attorney General James. “We filed this lawsuit to protect millions of New Yorkers from this harmful, misguided, and blatantly political attack. New York will not be bullied into paying more than its fair share, and we will continue to fight back.”

The lawsuit—which was originally filed in July 2018 in the U.S. District Court for the Southern District of New York—argued that the new SALT deduction cap was enacted to target New York and similarly situated states, that it interferes with states’ rights to make their own fiscal decisions, and that it will disproportionately harm taxpayers in these states. The top states with the highest average deduction for state and local taxes—a majority of which are Democratic—include New York, Connecticut, Maryland, and New Jersey.

The 2017 Tax Act reversed over a century of precedent in the federal tax code—drastically curtailing the state and local tax deduction by capping it at $10,000. An analysis by the New York state Department of Taxation and Finance projected that the cap would increase New Yorkers’ federal taxes by up to $15 billion annually.

As one of the nation’s top donor states, this attack is significantly more damaging to New York than many other states. Prior to enactment of the 2017 law, New York state already had the widest disparity among all states when factoring how much money New York sent to Washington, D.C. and the funding it received in return. Other donor states, including Connecticut, Maryland, and New Jersey are being similarly injured.

In its September 2019 ruling, despite ruling against the State of New York and its partner states, the U.S. District Court for the Southern District of New York agreed that the states had been injured based on their argument that the cap on the state and local tax deduction may depress home prices. By effectively raising state property taxes, the SALT cap will also reduce the value of a homeowner’s property, thereby discouraging home sales and decreasing the revenues the states are able to collect by taxing such sales.

Reports in the press also show anecdotal evidence that New Yorkers—particularly the state’s highest earners—are already moving their homes and businesses to states like Florida because of the cap on SALT deductions. In New York, the top 1% of taxpayers account for 46% of state income tax collections and losing them threatens the ability of the state to deliver on New York’s promise of providing opportunity for every person in the state.

realestateindepth.com/news/